Ch. 535                                           LAWS OF MARYLAND

(4)  The Authority shall find that there is a
reasonable probability that the Authority will recover its
initial investment and an adequate return on investment, and the
Authority's investment shall be recoverable within 5 years of the
equity participation financing IN A FRANCHISE AND WITHIN 7 YEARS
OF THE EQUITY PARTICIPATION FINANCING IN AN ENTERPRISE ACQUIRING
AN EXISTING BUSINESS.

(5)  The Authority's recovery shall be the greater of
the current value of the percentage of the equity investment in
the enterprise or the amount of the initial investment in the
enterprise.

(6)  The value of the business entity at. the time of
recovery shall be the average of 3 independent appraisals of the
value.

(c) The liability of the State of Maryland and of the
Authority in providing equity participation financing shall be
limited to its investments under the Program.

(D) WHEN APPLYING TO THE AUTHORITY TO ACQUIRE AN EXISTING
BUSINESS, AN ENTERPRISE SHALL HAVE THE FOLLOWING MINIMUM
QUALIFICATIONS:

(1)   THE ENTERPRISE OR ITS PRINCIPALS SHALL HAVE A

MINIMUM NET WORTH OF AT LEAST $75,000 PLEDGED AS SECURITY; AND

(2)   THE ENTERPRISE OR ITS PRINCIPALS SHALL HAVE 3 OR
MORE YEARS OF SUCCESSFUL EXPERIENCE WITH DEMONSTRATED
ACHIEVEMENTS AND MANAGEMENT RESPONSIBILITIES.

(E) WHEN BEING ACQUIRED, THE EXISTING BUSINESS SHALL MEET
THE FOLLOWING MINIMUM QUALIFICATIONS:

(1) THE EXISTING BUSINESS SHALL BE IN EXISTENCE FOR
AT LEAST 5 YEARS;

(2) THE EXISTING BUSINESS SHALL BE PROFITABLE FOR AT
LEAST 2 OF THE PREVIOUS 3 YEARS;

(3)   THE EXISTING BUSINESS SHALL HAVE SUFFICIENT CASH
FLOW TO SERVICE THE DEBT AND ENSURE ADEQUATE RETURN OF THE
AUTHORITY'S INVESTMENT

(4)  THE EXISTING BUSINESS SHALL HAVE THE CAPACITY FOR
GROWTH AND JOB CREATION;

(5) THE EXISTING BUSINESS SHALL HAVE ITS PRINCIPAL
PLACE OF BUSINESS IN MARYLAND; AND--------------------------------

(6) THE EXISTING BUSINESS SHALL HAVE A STRONG
CUSTOMER BASE.

- 3298 -